Things have moved on a little since the days when the greatest threat to the music industry was teenagers furtively slipping blank tapes into ghetto blasters to snatch the odd song from the radiowaves.

Today's young people, a new report suggests, are every bit as passionate about music as their predecessors. But their love of a good tune is matched only by their proficiency at obtaining it illegally and their reluctance to pay for it.

According to UK Music, the umbrella body that represents the British music business and which commissioned the research, the industry needs to fundamentally rethink the way it deals with young music lovers – ideally by offering them as much music as they can download for a fixed fee.

Its survey underlines the home computer's unassailable position as the portal to all things musical, with 68% of 14- to 24-year-olds listening to music on their computer every day, and the average hard drive containing 8,159 tracks – the equivalent of 17 full days of music.

With 61% admitting to downloading music through peer-to-peer networks or torrent trackers, 86% owning up to copying CDs for friends and 75% saying they have sent music by email, Bluetooth, Skype or MSN, young people's attitude to the law is refreshingly clear.

As one respondent put it: "It was my parent's computer, so if anyone was going to get in trouble, it wasn't going to be me. Excellent."

Feargal Sharkey, former lead singer of the Undertones and now chief executive of UK Music, is phlegmatic about young people's behaviour.

"Have they got the message that there is a thing called copyright and there is a philosophy of copyright? Yup. They get it. They just don't care," he says.

"What they're quite clearly trying to explain to us at the minute is that we can get it for free and we're not going to get caught."

Sharkey, however, can discern an opportunity within the crisis. The research, carried out by the University of Hertfordshire, reveals that an overwhelming majority of 14- 24-year-olds would be interested in signing up to an MP3 download service that would allow them to get as much music as they wanted for a fixed fee.

Of those currently using P2P networks 85% would welcome such a service, with 57% saying that it would stop them filesharing illegally and 77% of them claiming they would still buy CDs.

"If they're prepared to work with us if we give them an all-you-can-eat download service, well then, as an industry we may then well have to step up to the plate and try to provide them with that kind of service," says Sharkey.

There is evidence that the business is already moving in that direction. In June, the cable company Virgin Media announced the launch of an unlimited download service in partnership with the world's largest music company, Universal, which will allow subscribers to stream and download as many tracks as they want for £10-£15 a month.

Although the survey found huge enthusiasm for streaming music, such as on Spotify or YouTube, 78% of respondents said they would not be prepared to pay for a streaming service.

Despite their occasionally contradictory attitudes to dipping into their own pockets for it, almost all of the 1,808 young people surveyed said that music was a passion. A total of 90% said they would miss music more than anything else were they to find themselves inexplicably exiled to a desert island. The internet came second (61%) and mobile phones third (31%).

One of the report's most arresting findings was that 56% felt that the manufacturers of MP3 players, mobile phones and other recordable devices should pay a fee to the artists whose music their products enable to be copied.

Apparently oblivious to the role of free will in the copying process, one respondent noted: "You feel like they're doing the service – the artists, the people in the recording studio and all the people involved should be getting paid for what they do."

Sharkey agrees that it is all too often the artists who lose out when teenagers get their music for free.

"There was a young artist who wrote this incredibly passionate, insightful piece … he was just trying to get people to understand that all he actually wanted to do was make the music he loved and take it out to the world without having to live in poverty in the process," he says.